Business Category: Other Eating & Drinking Places and Restaurants
City/Region: Saint Charles
Listing Price: $350,000
Cash Flow: $146,900
This 20-year established, profitable and very stable A&W restaurant boasts the iconic brand emblematic of American values and simpler times. Their menu is filled with the classics including hot dogs, burgers, shakes, and of course, A&W Root Beer.
The Business has been in operation since 1999. Situated at the intersection of two major highways and proximate to a state park, the Restaurant is in a prime location and receives plenty of traffic.
The current owner has worked hard to make this restaurant very profitable and would now like to transition into retirement. He hopes to sell to a buyer who will continue to use the systems and procedures he has established and who will earn a very nice living has he has in the future. He has recently invested in upgrading equipment and executed a favorable long-term lease in place for the new owner’s benefit.
A&W has been in business since 1919 when it became the first restaurant franchise in the U.S. Few brands maintain the kind of history and personal connections felt toward A&W. Guests are nostalgic for the A&W restaurants they remember from their childhood and often jump at the chance to introduce it to their own children and grandchildren.
Opportunities For Growth:
(1) Growing Area and Community Building: The area is growing and full of opportunity for the Restaurant. Once guests enter A&W, the Company wants them to come back again and again. A&W restaurants are still valued community gathering places, especially in tightly knit small towns.
(2) New A&W Branding and Marketing: A&W’s modern marketing techniques leverage its nostalgic appeal in ways that attract every generation. To date, the Company has not fully utilized these advertising resources. A bigger social media presence would be an excellent way to stay connected with the local market and boost sales.
(3) Younger and More Energetic Operator: The current owner of the restaurant has operated the Restaurant for the past twenty years. The restaurant has been incredibly successful under his care. However, a younger and more motivated owner coming in with fresh eyes and more zeal for business might be just what the Company needs to grow beyond its current potential.
(4) Cross Merchandising: The restaurant is located in a shared space with a convenience store off of two major highways. A&W could potentially work with the convenience store on cross-merchandising, in order to boost sales for both businesses.
(1) Small Town Strength in a High Traffic Area: The restaurant operates in a strong, small town market where the A&W brand has thrived for its twenty years of operation.
(2) Prime Vendor Relationships Keep Supply Costs Down: A&W franchise partners can tap into significant discounts on food, janitorial supplies, and equipment. Their extensive network keeps distribution costs from spiraling, and the system overall helps A&W operate with wider profit margins.
(3) High Profit Margin: The Restaurant’s high-traffic location combined with loyal clientele keeps sales and profits stable and strong. When paired with low supply costs and recently-updated equipment, both of which keep overhead costs to a minimum, A&W has a high profit margin. The Company consistently generates 70% gross profit margins and over 21% cash flow margins.
(4) Raving Reviews & High Ratings: Strong customer reviews keep clientele coming back and also serve to bring in more new customers.
Real Estate Available: For lease
Reason For Sale: Retirement
Number of Employees: 16